In this paper we consider the newsvendor model with real options under discrete demand. We consider a mixed contract where the retailer can order a combination of q units subject to the conditions in a classical newsvendor contract and Q real options on the same items. We provide a closed form solution to this mixed contract when the demand is discrete and study some of its properties. In parti...

This paper is concernedwith a leader–follower stochastic differential gamewith asymmetric information, where the information available to the follower is based on some sub-σ -algebra of that available to the leader. Such kind of game problem has wide applications in finance, economics and management engineering such as newsvendor problems, cooperative advertising and pricing problems. Stochasti...

This paper examines a problem related to replenishing inventories at retailers in distribution networks operated under the paradigm of Vendor Managed Inventory (VMI). In the real world, complexity in analysing such systems arises out of numerous factors, including several random variables and a multitude of costs in the system. Much of the literature makes simplifying assumptions about these fa...

In this paper, we apply matching theory to supply chain coordination. We present mathematical optimization models similar to the newsvendor problem to provide appropriate conditions for retailer-supplier matching. In particular, our matching algorithm, compared to the general matching theory, has uniquely been affected by contract sizes and ordering sequences. We also study that our matching ap...

Recently, Lee and Hsu (2011) study the advertising effect on the distribution-free newsboy problem. In one of their results, they show that the optimal expenditure on advertising, the optimal order quantity and the optimal lower bound on the expected profit increase with the advertising effect parameters. Although this result holds in general, it requires additional assumptions. In this note we...

We consider the joint acquisition and pricing problem where the retailer sells multiple products with uncertain demands and the suppliers provide all unit quantity discounts. The problem is to determine the optimal acquisition quantities and selling prices so as to maximize the retailer’s expected profit, subject to a budget constraint. This is the first extension to consider supplier discounts...